Executive Summary

Soft quarter with broad misses and a guidance cut: Q1 revenue $356M and EPS $(0.49) versus consensus ~$385M and $(0.10), with EBITDA also below expectations; management lowered FY25 Adjusted EBITDA to $175–$185M (from $215–$235M) and Adjusted FCF to $5–$15M (from $25–$45M) amid Chinese tariffs, FX headwinds, operational issues, and a $12M environmental charge . Results vs estimates from S&P Global shown below.*
Primary drivers of the miss: accelerated CS shipments into Q4, plant outages and weather-driven energy spikes, weaker Paperboard and High‑Yield Pulp markets, and FX; management quantified ~$20M EBITDA hit from tariffs and signaled a softer Q2 due to April order cancellations/deferrals .
Strategic posture: tariff-mitigation (advocacy, market diversification, operational shifts), continued value-over-volume in Cellulose Specialties (CS), and biomaterials growth; Temiscaming Paperboard/HYP asset sale process is on hold given trade uncertainty .
Potential stock catalysts: clarity on CS tariff treatment and pace of rebooking post‑April pauses; evidence Q1 operational issues are resolved; progress diversifying fluff sales and shifting into viscose/non‑fluff; biomaterials milestones (e.g., Fernandina permitting, Jesup e‑SAF MoU) .

What Went Well and What Went Wrong

What Went Well
- Liquidity and covenant headroom intact: $272M liquidity (cash $130M, ABL $131M, France factoring $11M) and net secured leverage 2.9x covenant EBITDA .
- CS pricing held up: CS average price rose to $1,750/MT (+1% QoQ, +2% YoY), supporting a $31M segment operating profit despite lower volumes and plant challenges .
- Biomaterials steady and strategic: Net sales and OI flat YoY; France bioethanol running, lignosulfonate powder plant restarted; green capital €67M secured to fund projects (targeting $8–$10M 2025 EBITDA) .
What Went Wrong
- Broad miss and earnings reset: Adjusted EBITDA $17M (inclusive of $12M non‑cash environmental reserve) fell sharply vs LY and below consensus; FY25 guidance cut by ~$45M at midpoint .
- CS volumes and commodity exposure: CS volumes dropped 17% QoQ after pull‑forward; Cellulose Commodities volumes –23% QoQ; Paperboard and High‑Yield Pulp saw softer prices/volumes and custodial costs from Temiscaming .
- Tariffs/FX/energy: ~$85M revenue exposed to China’s 125% fluff tariff; FX turned unfavorable; January cold snap spiked energy costs; corporate OI hit by $12M environmental reserve .

Financial Results

Overall results vs prior quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$401	$422	$356
Net loss per share ($)	$(0.49)	$(0.25)	$(0.49)
Gross margin ($M)	$44	$37	$24
Adjusted EBITDA ($M)	$51	$51	$17

Q1 2025 vs S&P Global consensus (single‑period comparison)

Metric	Q1 2025 Actual	Q1 2025 Consensus
Revenue ($M)	$356	$385.0*
EPS ($)	$(0.49)	$(0.0967)*
EBITDA ($M)	$18.30*	$48.97*

Notes: EBITDA values and consensus figures marked with an asterisk were retrieved from S&P Global.*

Segment net sales ($M)

Segment	Q1 2024	Q4 2024	Q1 2025
Cellulose Specialties	$206	$241	$201
Cellulose Commodities	$94	$90	$75
Biomaterials	$7	$8	$7
Paperboard	$53	$60	$49
High‑Yield Pulp	$34	$32	$31
Eliminations	$(6)	$(9)	$(7)
Total	$388	$422	$356

Segment operating income (loss) ($M)

Segment	Q1 2024	Q4 2024	Q1 2025
Cellulose Specialties	$38	$45	$31
Cellulose Commodities	$(19)	$(16)	$(13)
Biomaterials	$2	$2	$2
Paperboard	$8	$4	$(2)
High‑Yield Pulp	$(1)	$(8)	$(7)
Corporate	$(11)	$(16)	$(26)
Total OI (loss)	$17	$11	$(15)

KPIs: average selling prices and volumes

KPI	Q1 2024	Q4 2024	Q1 2025
CS Avg Price ($/MT)	$1,724	$1,732	$1,750
Commodities Avg Price ($/MT)	$842	$807	$863
Paperboard Avg Price ($/MT)	$1,382	$1,394	$1,321
HYP Avg Price ($/MT)	$559	$523	$518
CS Volumes (‘000 MT)	113	134	111
Commodities Volumes (‘000 MT)	106	109	84
Paperboard Volumes (‘000 MT)	38	43	37
HYP Volumes (‘000 MT)	50	49	48

Balance sheet and cash flow snapshots

Total debt $736M; net secured debt $624M; liquidity $272M (cash $130M, ABL $131M, France factoring $11M); net secured leverage 2.9x .
Cash from operations $40M in Q1; Adjusted FCF $10M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	FY 2025	$215–$235	$175–$185	Lowered
Adjusted Free Cash Flow ($M)	FY 2025	$25–$45	$5–$15	Lowered
CS EBITDA ($M)	FY 2025	$255–$265	$237–$245	Lowered
Cellulose Commodities EBITDA ($M)	FY 2025	$3–$8	~$(5)	Lowered
Biomaterials EBITDA ($M)	FY 2025	$8–$10	$8–$10	Maintained
Paperboard EBITDA ($M)	FY 2025	~$15	~$25	Raised
High‑Yield Pulp EBITDA ($M)	FY 2025	~$(14)	~$(20)	Lowered
Corporate Costs ($M)	FY 2025	~$50	~$70	Higher
Net secured leverage target (x)	YE 2025	—	~3.1x covenant EBITDA	New disclosure

Drivers of guidance change: tariffs (~~$20M EBITDA impact), Q1 operational under‑performance (~~$15M), $12M non‑cash environmental charge in corporate, FX headwinds (~$5M), and softer Paperboard/HYP .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 & Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/macro trade	Highlighted Q4 risk to Paperboard (USMCA compliance, tariff scenarios) and mix/price pressure; no China 125% fluff tariff yet .	125% Chinese tariff directly impacting fluff (~$85M revenue exposed); secondary CS customer supply chain effects; shifting to non‑tariff markets and non‑fluff commodities .	Deteriorated
Operations/plant reliability	Jesup fire in Oct-24; maintenance timing; Temiscaming HPC suspension and custodial costs .	Q1 operational setbacks (equipment failures, weather) largely resolved after March/April outages; Q2 light due to April order pauses .	Near‑term improving
CS pricing/strategy	Value over volume, mid‑single digit 2025 CS price increase expected .	CS price +2% YoY; full‑year CS EBITDA now $237–$245M; expectation CS orders resume, tariff exemption effectively observed by customers (not official) .	Moderating vs plan
Cellulose Commodities mix	Reduced exposure to non‑fluff; 2025 guide previously +$3–$8M EBITDA .	Fluff to China under tariffs; pivot to India/Africa/Middle East; viscose may be exempt; 2025 EBITDA ~$(5) .	Weaker
Paperboard & HYP	Anticipated pressure from new capacity and Chinese oversupply, respectively .	Paperboard 2025 EBITDA ~$25M; HYP ~$–20M; one HYP line to idle 11 weeks from early June .	Paperboard up; HYP down
Biomaterials	France bioethanol online; GRAS prebiotics; financing expected .	France ethanol operating; pipeline of CTO/prebiotics; pursuing Fernandina (legal remedies after site plan denial); Jesup e‑SAF/CO₂ MoU with Verso Energy (post‑Q1) .	Steady progress

Management Commentary

“Our 2025 first quarter performance fell well short of our expectations… I take full responsibility… Several compounding challenges… tariffs… operational setbacks… higher energy… environmental reserves… FX… Paperboard and High‑Yield Pulp dynamics.”
“Approximately $85 million of RYAM annual revenues are currently exposed to a 125 percent import tariff from China… we anticipate shifting production toward non‑fluff commodities.”
“Adjusted EBITDA guidance is now $175 million to $185 million… ~a $45 million reduction… $20 million reduction from tariff‑related impacts… $15 million from first quarter production problems… $12 million noncash environmental charge… and ~$5 million FX headwind.”
“Q2 results will be lower than a straight linear extrapolation” following April order cancellations/deferrals; most rebooked for 2H .
“We have assumed in our guidance that CS products will not be exposed to tariffs… shipments that were previously paused… have now resumed” (not yet officially announced) .

Q&A Highlights

Fluff pulp strategy under tariffs: Some Chinese customers absorbing tariffs near‑term but not sustainable; diversifying to India/Africa/Middle East; exploring shift to viscose (appears exempt) and, if needed, paper pulp .
CS demand cadence: April cancellations/deferrals; rebooking underway; expectation of normalization by July with a light Q2 .
Liquidity/covenants: Management comfortable with ~$272M liquidity and 2.9x net secured leverage; ABL used for timing only .
Energy/input costs: January cold snap drove spot gas purchases despite hedges; caustic/sulfur/ammonia indices assumed higher vs 2024 .
Biomaterials feedstock and Fernandina: Actions to improve Tartas feedstock yield and consider GMO yeast; pursuing legal remedies on Fernandina permitting; see strong margins and plan to invest .

Estimates Context

Q1 2025 misses vs consensus: Revenue $356M vs $385M*, EPS $(0.49) vs $(0.097), EBITDA $18.3M vs $49.0M*; Adjusted EBITDA per company was $17M (inclusive of $12M non‑cash environmental reserve) . S&P Global consensus figures shown with asterisks.*
Forward quarters (context): Street models Q3 2025 revenue ~$373.6M*, EPS $(0.07), EBITDA ~$54.7M; Q4 2025 revenue ~$367.9M*, EPS $(0.06), EBITDA ~$50.0M, reflecting gradual recovery but below prior internal guidance (pre‑cut).*

Notes: Values marked with an asterisk were retrieved from S&P Global.*

Key Takeaways for Investors

The guide‑down squarely reflects tariffs, ops issues, FX and a $12M environmental reserve; near‑term earnings risk persists into Q2 before potential 2H normalization as orders rebook and plant performance improves .
Watch tariff developments: confirmation of CS tariff treatment in China and success diversifying fluff volumes will drive estimate revisions and multiple sensitivity .
Segment trajectory is bifurcated: CS remains the earnings engine (FY25 EBITDA $237–$245M) while commodities/HYP are drags and Paperboard shows modest improvement vs prior guide .
Liquidity and covenants appear manageable at 2.9x net secured leverage with $272M liquidity, reducing refinancing stress despite lower FCF guide ($5–$15M) .
Biomaterials provide optionality: execution milestones (CTO, prebiotics, Fernandina permit, Jesup e‑SAF/CO₂ MoU) could add medium‑term value and diversify earnings mix .
Trading setup: Q2 is likely soft; catalysts include CS tariff clarity, visible fluff/viscose mix shift, and proof of operational stabilization; downside risk if tariffs persist or Paperboard/HYP pricing weakens further .
Asset sale remains paused: Temiscaming Paperboard/HYP sale is on hold; re‑engagement could unlock value if trade uncertainty abates .

References: Company Q1 2025 8‑K earnings release and schedules ; Q1 2025 earnings call transcript ; Q4 2024 and Q3 2024 results for trend context and .

Estimates and consensus values marked with an asterisk were retrieved from S&P Global.*

RAYONIER ADVANCED MATERIALS INC. (RYAM)·Q1 2025 Earnings Summary